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Cpa Section Iv Quantitative Analysis. Question Paper
Cpa Section Iv Quantitative Analysis.
Course:Cpa Part Ii
Institution: Pinnacle Business School question papers
Exam Year:2011
CPA Section 4
Quantitative Analysis
Linear Programming
Question 1
Maridadi Furnitures Ltd is planning to make tables and chairs. They both require material and labour time. To manufacture a table and a chair requires 3 units and 4 units of direct material respectively, of which they are 96 units available in a week. Making a table or a chair each takes 6 hours and there are 168 labour hours available in a week. Whereas the market for tables is unlimited, only 18 chairs can be sold weekly. The price per table and chair are £50 and £60 respectively whereas their unit variable costs are £38 and £40 respectively. Fixed costs average £200 per week.
Required:
Advise Maridadi Ltd on the weekly production schedule in order to maximize contribution to profit.
Question 2
a. Suppose additional 20 units of material can be obtained at £2.3 per unit. Advise the firm on what it should do. What will be your O.F value if your advice is taken?
b. It is possible toe expand chair demand by four units at a promotional cost of £5 per unit. Is this desirable? What would be the effect on the O.F if this move was taken?
c. Suppose the contribution per table increases to £15, what will be the basis change? What is special about this point and what is the new O.F value?
Question 3
Ujuzi Ltd wants to mix up at least 500kgs of a special baby food. There are 2 ingredients in the mixture P1 and P2. P1 the 1st source of protein costs £5 a kg while P2 the 2nd source costs £8 a kg. Chemicals constraints dictate that the mixture contain not more than 400kgs of P1 and at least 2000kgs of P2.
Required:
Determine the amounts of P1 and P2 in the mixture which will minimize total cost of the product.
Question 4
A small firm produces two qualities of a product - Standard and De-luxe. The contribution per unit is £100 for the Standard and £300 for the De-luxe.
Each omel requires 1 hour per unit in the machine shop and 40 machining hours are available per week. The Standard model can be assembled and finished in 2.5 hours per unit but the De-luxe takes 10 hours per unit. There are 200 hours per week available for assembly and finishing.
Market research suggests that the maximum weekly sales of the De-luxe model will be 18 units. The products use a special component, of which only 1,200 are currenty available per week. Each Standard unit uses 25 components and each De-luxe unit needs 50.
Required:
Analyse the current position and recommend a weekly production plan, showing its contribution.
Question 5
Whilst keeping to the De-luxe sales limit, the firm would like to maximize contribution and realizes that this may mean paying more to increase the supply of some of the resources required. It is not possible to increase the machining hours but Assembly hours and the number of components can be increased as follows:
Assembly hours: £12 extra per hour for hours above 200 for additional amount above existing price price to increase supply
Component: £1 extra per component for components above 1,200 for additional amount above existing price to increase supply
Required:
Assess whether it is worthwhile increasing the supply of assembly hours and components.
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